Mumbai: In a relief to the Atul and Rahul Kirloskar faction, the Securities Appellate Tribunal (SAT) on Monday directed the markets regulator to pay ₹5 lakh for failing to unfreeze their shares in Kirloskar Industries Ltd.In October 2020, two Kirloskar Brothers—Atul and Rahul Kirloskar—were penalized by Sebi through two separate orders, alleging insider trading in shares of Kirloskar Brothers Ltd (KBL).On the other hand, Kirloskar Industries Ltd (KIL) was facing charges for failing to adhere to listing regulations. Under these orders, the Securities and Exchange Board of India (Sebi) restrained the three Kirloskar brothers from accessing the capital market for a specified period. The order was then challenged by the Kirloskars before the Securities Appellate Tribunal seeking a stay on the effect and operation of the order. KIL is controlled by younger brothers Atul and Rahul Kirloskar, while Kirloskar Brothers Ltd is majority owned by Sanjay Kirloskar who was also penalized under a separate order for alleged violation of insider trading norms.“We direct Sebi to pay (a) cost of ₹5 lakh to be deposited before the registrar of this tribunal within two weeks from today. In the event, Sebi finds that the fault lay with NSDL, it will be open to them to take appropriate remedial measures against NSDL,” said justice Tarun Agarwala in his order on Monday.Making some serious observations against the regulator, justice Agarwala said that “due to the market regulator's lackadaisical approach the interest of the investors suffered”.In December 2020, while granting relief to Kirloskar brothers, SAT had stayed the effect and operation of the Sebi order, subject to an undertaking to be provided by the Kirloskar brothers that they would not sell the shares of Kirloskar Industries Ltd.Following the tribunal’s order, the demat account was defreezed except for the shares held by the brothers in KIL which remained frozen. In October 2022, the SAT finally quashed the Sebi order of 2020.In spite of that, their shares in KIL remained frozen. Rahul and Atul Kirloskar wrote an email on 22 February 2023 to Sebi requesting depository participant National Securities Depository Limited (NSDL) to be directed to unfreeze the shares.Although NSDL sought Sebi’s guidance in the matter, NSDL said that it did not elicit any response from Sebi regarding the defreezing of the shares.On the other hand, Sebi contended that there was no default on their part and that NSDL is responsible for not defreezing the shares of the appellants.“In the event, Sebi finds that the fault lay with NSDL it will be open to them to take appropriate remedial measures against NSDL,” Justice Agarwala noted in his eight-page order.